Eurofighter deal set to be signed

London, July 29, 2009

The nations behind the Eurofighter Typhoon will sign a contract confirming the next wave of combat jet production in Munich on Friday, the consortium building it said.

The signing of "tranche 3A" is seen as a key milestone to keep production lines open and pave the way for the release of payments to manufacturers EADS, BAE Systems and Finmeccanica.

Eurofighter was conceived 25 years ago and involves Germany, Spain, Italy and Britain building more than 600 high-performance fighter jets. Britain recommitted itself to the defence contract in May after political pressure from Germany.

To ease budget worries, buyer nations agreed to split the third and final tranche of orders into two parts, called 3A and 3B. But industry sources said a final signature was held up by talks with the manufacturing consortium over government demands for extensive savings in long-term "life-cycle" costs.

The move comes as global competition for fighter sales heats up. Eurofighter is among several models of combat jet competing for a major purchase contract in India. Saudi Arabia is in talks to buy more Eurofighters, sources said last month.

The Eurofighter consortium comprises BAE Systems on behalf of Britain, the planemaking division of Italy's Finmeccanica and EADS, which represents both Germany and Spain.

EADS is also the manufacturer of the A400M military transport plane, which won a reprieve when seven countries, including Britain, Germany and Spain, agreed last week to renegotiate the project. -Reuters